How much do companies spend on training per employee?

How much do companies spend on training per employee? | LearnExperts
In 2020, U.S. companies spent $83.5 billion. In 2021, this increased to $92.3 billion.
U.S. Training Expenditures 2020 vs 2021

The latest survey by Training magazine on the U.S. training industry demonstrates how much of a shift COVID-19 and the Great Resignation has had on training expenditures, budgets, and delivery methods.

The shift towards virtual learning and leveraging training as an employee well-being and retention tool resulted in U.S. training expenditures rising by nearly 12 percent to $92.3 billion in 2020-2021. The survey also found that the amount spent to pay training staff also skyrocketed to $68.7 billion in 2021, compared to $42.4 billion in 2020.

In 2020, U.S. companies spent $42.4 billion in training salaries. Payroll increased to $68.7 billion in 2021.
U.S. Training Staff Payroll 2020 vs 2021

In 2020, small companies spent $1,678 per learner, medium companies spent $581 per learner and large companies spent $924 per learner. In 2021, small companies spent $1,433 per learner, medium companies spent $924 per learner and large companies spent $722 per learner.
Training Expenditures per Learner 2020 vs 2021

Training per Employee in U.S.

When it comes to the question on how much do companies spend on training per employee, the survey found that large companies with more than 10,000 employees and small companies with 100 to 999 employees spent less in 2021 compared to 2020. Midsize companies with between 1,000 to 9,999 employees increased spending by over 55 percent.

In terms of how much money companies spend per employee, large companies spent $1,678 per learner in 2020 compared to $1,433 in 2021. Medium companies spent $581 per learner in 2020 compared to $924 in 2021 while small companies spent $924 per learner in 2020 compared to $722 in 2021.

In 2021, 20% of manufacturing companies decreased their training budget, 37% increased their training budget and 43% kept their budgets the same. In 2021, 18% of Government/Military organizations decreased their training budgets, 29% increased their training budgets and 53% kept it the same. In 2021, 20% of services companies decreased their budget, 36% increased their budget and 44% stayed the same. In 2021, 18% of retail/wholesale companies decreased their budget, 41% increased their budget and 41% remained the same.
2021 Budget Change by Industry

Training Budgets

When looking at overall employee training budgets, manufacturers, services organizations, retail/wholesale, government/military organizations for the most part increased or kept their budgets the same.

For the companies that did increase their budgets, the survey found that most of the companies increased their budgets between 6 and 15 percent. Only small companies had a substantial number of respondents who increased their budgets by more than 25 percent.

Training Delivery

With so many employees unable to go to their office or meet at training facilities, it is no surprise that remote training increased to 31 percent, up from 19 percent in the previous year. While many enjoyed the conveniences and benefits of online training, 56 percent of respondents indicated they plan to return to some classroom training while maintaining some of the remote learning introduced during COVID-19.

In terms of delivery methods, both small and midsize companies leveraged blended learning the most in 2021. Blended learning is where a course is delivered using a combination of methods including instructor-led classroom, virtual classroom or webcast where an instructor is in a remote location, and online or computer-based where there is no instructor.

According to the survey, some 43 percent of hours were delivered with blended learning techniques, up from 33 percent last year.

- Virtual classroom/Webcasting accounted for 37 percent of hours delivered

- Online or computer-based technologies accounted for 34 percent of hours delivered

- 30 percent of training hours were delivered by an instructor in a classroom setting

Interestingly, blended learning is used exclusively or mostly by 15 percent of the respondents.

Comparing with Responses in the UK

In 2021, 32% of UK companies surveyed decreased their L&D headcount, 18% increased staff and 50% kept the same number of staff members.
Changes in L&D Headcount in 2021 (UK)

UK’s Chartered Institute of Personnel and Development (CIPD) also conducts an annual survey that examines current practices and trends within learning and development. The latest survey which was released in May 2021 found that 58 percent said that their learning and development (L&D) budget stayed the same while 31 percent said that their L&D budgets decreased in the last 12 months. Only 11 percent reported an increase in budgets

In terms of headcount, 50 percent reported that their L&D headcount stayed the same; 32 percent reported a decline and 18 percent report an increase in number of L&D staff.

In 2021, 31% of UK companies surveyed decreased their L&D budgets, 18% increased budgets and 50% kept the same spend.
Changes in L&D Budgets in 2021 (UK)

Learning Delivery in UK

47% used webinars. 41% used online or e-learning courses. 35% used in-house, curated or learner generated content. 17% used blended learning. 11% used augmented reality or virtual reality.
L&D types used in the last 12 months by UK companies

According to the survey, 70 percent reported that their use of digital learning solutions increased over the previous 12 months and 36 percent reported an increase in investment in learning technologies. Most organizations agreed or strongly agreed that they were successfully using learning technologies and are innovating in their use of learning technologies.

In terms of modalities, 47 percent reported that they had arranged or funded webinars or virtual classrooms in the last 12 months; 41 percent were providing digital e-learning or online courses; 35 percent leveraged digital content; and 17 percent offered blended learning opportunities.

When looking at digital technologies organizations currently use to support content delivery and collaboration within their workforce, webinars/virtual classrooms by far saw the greatest growth in 2021, up to 51 percent in 2021 compared to 36 percent in 202. Other digital technologies that are currently being used to support content delivery and collaboration within the workforce include:

- Learning management system (28 percent)

- Social learning (28 percent)

- Online education programs (23 percent)

- Digital tools to support coaching and mentoring (21 percent)

- Open education resources (21 percent)

- Bitesize film/video (21 percent)

- Digital tools to support learning within the workflow (21 percent)

- Job aids (infographics, checklists) (17 percent)

- Podcasts/vlogs (16 percent)

- Learning experience platform (14 percent)

- Mobile apps (13 percent)

- Learner-generated content (11 percent)

Tackling L&D Challenges

What the above surveys did not tackle in detail was the challenges faced by employees and L&D departments with their learning programs. A recent survey by Oracle where they interviewed 600 people in the United States found that main training hurdles included not enough time for training, not enough training, and training that isn’t relevant.

Stat: 57% of respondents said that the training provided by their employers is “sometimes irrelevant, boring, or outdated”; 20% said that it “often” was, and 11% said it was irrelevant, boring, or outdated “all the time.”

The authors of the study noted that the lack of relevant and tailored training can be explained partly by the time that it takes an average L&D team to produce one training course. In their survey of 2,310 HR decision-makers of those that use a learning platform, most said it took a day or more to create one course and many said it took about a month or more!

A surprising 51 percent did not use any learning platforms for course creation which is both a detriment and an opportunity for L&D programs, regardless of their industry and L&D team size.

The authors also noted that employers weren’t providing enough training in an ‘on the go’ format, like a mobile app or a video that can be watched on a smartphone. Providing bite-sized training chunks (i.e., microlearning) makes it easier for employees to find the time to take courses or go back to content that they would like to review again.

Our Perspective on Course Creation Challenges

Our experience at LearnExperts has been that slow course creation can be attributed to many reasons, but the number one reason is that the process today is still traditional where people are using largely interviewing subject matter experts (SMEs) and then translating their knowledge into course content using word processing tools (like Word or PowerPoint). This is a long and manual process that requires expertise.

Other reasons why course creation is slow includes company and team size, complexity of the course content, length of course, schedules of SMEs, availability of reference materials and the adoption of technology for course creation.

Since the process to create course content is still very traditional and manual and that’s what we encounter all of the time in our client engagements, we decided to create LEAi, our digital course developer. This AI-enabled tool allows companies to use the material they already have to create well-structured knowledge-sharing and training programs.

With LEAi you can now create instructor-led training, eLearning, knowledge base articles, virtual class content, presentations, webinars, videos and more in minutes, rather than days, weeks or months.

If you are in the market for a course creation tool or would like some advice on how to accelerate your L&D program, give us a call!

Sarah Sedgman

CEO, LearnExperts